Phillip Yoder, 41, Ligonier, Indiana, was sentenced on his guilty pleas to wire fraud, bank fraud, mail fraud and bankruptcy fraud.
According to his plea agreement, beginning in or about 2014 and continuing until in or about July 2015, Yoder and others, sometimes working through the entity, KOH Enterprises, LLC, defrauded persons via a “Foreclosure Rescue Scheme.” As part of the scheme to defraud, Yoder and others monitored foreclosure notices of properties, and would then approach distressed homeowners and convince them to transfer title of the property in exchange for false promises of being able to avoid further foreclosure obligations. They falsely represented to these homeowners that they would handle their mortgage arrearages and the foreclosure process. Because of these false representations, the homeowners vacated the property and transferred their interest in the property through a Quitclaim deed to business entities. Those entities then furthered the scheme by recording the Quitclaim at the local Recorder’s Office. However, the Quitclaim deed did not extinguish the homeowner’s outstanding mortgage debt. Yoder and others would use the mail to send a fraudulent document, entitled an “International Promissory Note”, purporting to satisfy the outstanding mortgage debt to the financial institution holding the mortgage. Simultaneously, Yoder and others would cause a fraudulent “Satisfaction of Mortgage” to be filed with the county recorder’s office in an attempt to discharge the mortgage. They would then convey another Quitclaim deed to an investor or purchaser of the properties, even though the property was still encumbered. The total loss to investors and insurers was $1,466,136.20.
With regard to the bankruptcy fraud, which resulted from a referral by the U.S. Trustee for Region 10, according to his plea agreement, on or about February 24, 2016, Yoder knowingly and fraudulently made a material false declaration, certificate and verification under the penalty of perjury in his bankruptcy proceeding. He claimed as an asset a “Billion dollar gold bond” when he knew that the purported bond was fraudulent and worthless. In his bankruptcy proceeding, Yoder claim $792,592.46 in debts.
Yoder was sentenced to serve 87 months each on the mail fraud, bank fraud, and mail fraud counts, and 60 months on the bankruptcy fraud count, all to run concurrently. Yoder also was sentenced to two years of supervised release and ordered to pay a total of $581,386.04 in restitution.
The announcement was made by U.S. Attorney Kirsch.
“Creating a scheme that enriches the defendant while defrauding banks, insurers and average home owners, jeopardizes our financial system,” said U.S. Attorney Kirsch. “My Office in coordination with all our law enforcement partners will continue to aggressively prosecute these type of cases.”
“Everyone has the right to expect honest representation from those they do business with. Targeting homeowners with this type of fraudulent activity when they are already dealing with financial hardship is not only illegal but a violation of trust and won’t be tolerated by the FBI,” said Grant Mendenhall, Special Agent in Charge of the FBI’s Indianapolis Division. “The FBI and our law enforcement partners will continue to investigate and pursue those who try to line their pockets at the expense of others and hold them accountable.”
HUD Special Agent in Charge Geary stated, “At such a critical time for the Department of Housing and Urban Development, with programs that are vital to the well-being of so many in our communities, it is critical that those resources are completely dedicated to those in need. The HUD Office of Inspector General is committed to partnering with Federal prosecutors and fellow law enforcement to aggressively pursue those engaged in activities that harm HUD’s Single Family housing programs.”
“Today’s sentence sends a strong message to those who abuse the bankruptcy system,” stated Nancy J. Gargula, United States Trustee for Indiana and Southern and Central Illinois (Region 10). “Providing false documents such as fictitious “bonds” to the United States Bankruptcy Court undermines the integrity of the system and will not be tolerated. We appreciate the commitment of U.S. Attorney Kirsch and our law enforcement partners to holding those who abuse the bankruptcy system accountable. We welcome information that will help detect fraud and abuse in the bankruptcy system and we encourage citizens to report suspected bankruptcy fraud through our Internet hotline at USTP.Bankruptcy.Fraud@usdoj.gov.” The United States Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws.
This case was investigated by the Federal Bureau of Investigation and the U.S. Department of Housing and Urban Development’s Office of Inspector General in collaboration with the Northern Indiana Bankruptcy Fraud Working Group coordinated by the U.S. Trustee. The case was handled by Assistant U.S. Attorney John M. Maciejczyk.